1100 Jobs go as flowserve integrates ID

L

ISSUE 57 SEPTEMBER 2000 ISSN 13596128

1100 JOBS GO AS FLOWSERVE INTEGRATES IDP Having completed the US$775 million acquisition of Ingersoll-Dresser Pump (IDP) from Ingersoll-Rand. Flowserve has announced a range of measures that \\ilil result in I1110 job losses and the closure and downskin;; of a number of facilities.

Othcl cloburt’s

laciltlt~s-relatcc

cxpeckxi to bc incr the neut I&L ueeks. Phc ntajortty 01‘ these reduction< al-t planned to take place 1Xli)t.c : I Decembct 7000 and 1111’c lmlp"ll~ cxpccts to conipletc ;(I1 conwlidation ;icti\.il! \\ ltll:ll IS lllolltll\. annouiiccd

art

Flowsme also acknowledgcsd that certain sales and G&S support personnel will be reduced. Flovmrve acquired IDP on X August. creating the l\orld’s second largest pump company. behind ITT Fluid Technology and abo1.e Ebar;t. ( onimenting on the deal. Flou ser\ e chairman, prestdent and CEO Scott Greet sn~d they couldn’t be morr enthusiastic thett about acquisition of’ IDP. “Thts oh truly a transforming acquisition catapulting Flower~e to the nwkct leader in our keq markets. It bolsters Ho\4 serw’s product offcrtng4 in the petroleum. chcniical and power industries and broadens our activities in the arcas of water and general industry.” Greer said. Less than a week later Flo\\ serve announced plans to consolidate facilities, retlucing cmploytnent levels bq approuimatcly I 100. in ordet to help realise the estiniatecd IJSS75 million in annual syncrgies expected by December 200 I Company spokesman Scan C‘lancy told I-‘rm~~ /m/t/.\/):I’ Imr(~:s/ that approximalel> 800 jobs hvould go at US facilttics and .?OO at internattonal manttfacturing sites.

“I appreciate decisions like these create a very difficult time for the affected cmployces and their families.” said Grccr. “While such actions are always unpleasant. they noncthelcss must be done to tmablr I IO\ISX~L to beet compctc 111 the morld\\.ide marketplace.” Floaser\c expects that the IDP acquisition will be earnings neutr;tl. before special charges, in 2000. hut adtnits that the four-month delay in closing the deal will keep the company from rcalising anticipated third quarter synergies that mould haw helped offset incrcascd costs related IO the transaction. These costs of about USSZO tnillion include tncreawd interest expense. amortt\atiou and depreciation related to purchase accottnting. IDP.4 thit-d quarter earnings are e\pectcd to ofset only .tbout hall. of these increased expenses. This is expected to remIt in the acquisition being diluti\c for the third quarter. But it is cxpccted to bc accrcti\c in the tiwth quarw and earnings neutral for lhc year, before special charge> As part of its antitrust awmmnt u ith the US c Department of .lustice. Ho\+ vmc \vill di\wt eight pump I~ncs. md the repair and ser\ ice centrcs in Batavia. Illinois, and La Mimda, Californta. and its manufacturing facilit> in Tulsa. Oklahoma. This move \Z;IS designed to atidres:, DO.1 concerns about

highly engineered pumps for installation in oil refinetics and power generatton facilitics in the USA and affects less than 3”;) of the cotnbined I900 revenues of I~lowserw and

IDI'

(SIX

Pm?/,

Irlrlfrsl,")

+rc//~,\i. .lune 2000). Until its planned di\ cstiture. Fllhiw\e \\.tII opcratc rhc Tulsa factlit) ;15
After a four-month delay and much uncertainty, Flowserve can at last move forward with the integration of IDI? Having borrowed heavily to finance the acquisition of IDP, Flowserve cannot afford to miss its target of US$75 million in annual synergies. Reassuringly Flowserve has wasted no time in announcing efforts to reduce overcapacity and eliminate overlap between the two pump companies. While the closures and downsizings were expected (see Pump Industq Analyst, March 2000), job losses are understandably a highly emotive issue and Flowserve has a challenging 15 months ahead to see this programme of change successfully through. In an increasingly competitive pump market, a priority for Flowserve during this integration phase, will be to maintain customer service levels. D

Pump Industry Analyst

September 2000

permit development and negotiations and treatability studies for industrial customers.

FRENCH INVEST IN BRAZIL

Deutsohe Deutsoha

Vortex

Grundfos

Pumps Corporation

Hyundai

Heavy Industries

Lyonnaise des Eaux has been selected to manage the water concession for the city of Manaus in Brazil. The contract will provide water to the city’s 1.2 million inhabitants. It is the largest private water contract ever awarded in Brazil. Under the terms of the agreement Lyonnaise des Eaux will acquire a 90% stake in the water company Manaus Saneamento for f I 11 million. Simultaneously, a 30-year concession contract will be signed with the municipality. An investment programme of f300 million is planned for the duration of the contract. The main objective is to improve the drinking water services, and expand it to periurban areas. The company will also develop the wastewater treatment services which currently only apply to 10% of the population.

6

10 13

11 7, IO 1

Orbit Pump Manufacturing 10 Patferson Pump 7 Perne Gourdin 13 I Pentair 8,10,12 Precision Caetparts 10 ProMinent 10 Pullen Pumps 13 Robbins & Myers 10 Salmaon 12 Sarfin Pumps 6 Schlumberger 12 Sterling F&id F&d Systems 11 Sulzer 10,11,13,16 Sulz@r Burckhardt 16 Sulzer Sulzer Dalian Dalian Pumps and Compressors 13 Sundyne 16 Svedata 11 Textron 12 TI Group 10 Tokheim 13 Trebur 7 United Dominion 10 Vivendi Environnement 13 Voith Siemens Hydro Power 11 Warman IO, 16 Weir IO,16 1I Weir Engineering Services Weir Pumps 11 WorldWater 11

AZURIX BUYS BAKER HUGHES DIVISION

-

Azurix Corp has acquired Baker Hughes Industrial Services Inc (BHIS), an industrial water and wastewater operations and engineering support company primarily serving customers In the refinery and petrochemical market. BHIS will be renamed i 4zurix Industrial Operations (Zorp and will become part of 4zurix Industrials Corp, which services Ilrovides outsourcing t o industrial customers. The (:urrent contracts held by BHIS annual revenues of Ijrovide Ipproximately US$lO million. ;3HIS’s other services include cmgineering support, operating t raining, O&M manuals, enviI.onmental data management,

USFILTER WINS JORDANIAN CONTRACT USFilter will supply a Memcor Continuous Microfiltration (CMF) membrane system to the city of Salt, Jordan to purify water from three springs by removing coliform bacteria and cryptosporidium. Currently, the city of Salt treats the water with chlorine only and further treatment is required to bring the system up to the standards mandated by the Water Authority of Jordan. The 6.34 million gallon per day facility includes seven CMF units. One unit can be used as a 400 000 gallon per day backwash recovery unit that will be piped to a nearby wastewater treatment plant, The US$3.3 million system was funded by the United States Agency for International Development (USAID) and designed by USAID’s consulting engineer Camp Dresser & McKee (CDM) International. The general contractor is Morganti Group of Amman, Jordan. The CMF systems will be manufactured at USFilter’s Colorado Springs facility. This fast-track project is scheduled for completion early next year, with system start-up in midMarch 2001.

OGDEN SECURES FLORIDA KEYS PROJECT New Jersey-based Ogden Water Systems has won a US%59.8 million contract to design, build and operate a 2.4 million gallon per day wastewater treatment plant and central sewer system in Key Largo, Florida. The new system will replace the cesspits and septic

tanks currently used in Key Largo. Ogden’s proposal calls for a 139 mile vacuum sewer system, including 15 master vacuum stations, 151 pump stations and 3000 vacuum chambers and valves. The award guarantees the project design and construction within a 36month timeline as well as guaranteeing system treatment performance that exceeds Florida Department of Environmental Protection Standards. In addition, a 20-year operations contract will generate expected revenues of US$47 million,

FUNDING FOR CLEAN-WATER PROJECTS The Pennsylvania Infrastructure Investment Authority has approved US$70.7 million in low-interest loans and USS7.8 million in grants for 45 drinking water, wastewater and stormwater projects. The state funding ranges from US$lOO 000 to replace a malfunctioning on-lot sewagetreatment system for a healthcare facility, to US$lS million in order to upgrade and expand an existing wastewater treatment facility.

ADB BACKS EAST TIMOR The Asian Development Bank (ADB) has approved a project to repair East Timor’s badly-damaged water supply infrastructure and to re-establish institutions and systems to operate the sector. The Water Supply and Sanitation Rehabilitation Prosect will be financed by a LJS$4.5 million grant from the Trust Fund for East Timor and nanaged by ADB. The total need for rehabiliating the sector is estimated at almost US$40 million for the Fiscal year 200 1-2003.

Septcmbcr

X00

Pump

BP AMOCO AIMS FOR DOUBLEDIGIT GROWTH BP Amoco expects to increase gross capital spending to an average of LM13.S hillion a year for the next three years, growing underlying earnings b> at least 10% per year over the same period. The addttional spend. up from 8 comparable annual avcragc oi‘ tJS$l2 billion fh the three years to 1999 for RI’ Amoco, ARC’0 and Burmah Castro1 combined. will be used to accelerate higl~-returli projects from the groupB enlargccl portfolio. in particular gas prodLlcti~~1~ from Tril~id~~d and oi I production from the deep natcr GulL‘ol’ Mesico. Speaking lysts

ill

to i~ii~~~~ici~~l anii-

t.o11tion.

chief

eXCCll~

ti\c

Sir dohn Brow~;ne said hc‘ his nianilgcmcnt team aic determined that the extra spend, which excludes acquis:tions. \\ III be accompanied b> and

a

continuing

costs

aMi

ty liom

li)cus on unit mccd productI\ ieuistilig ;issots. alI1

FLUOR TO BUILD ULTRA-CLEAN FUELS REFINERY Fluor Corporation’s engineering and ~onstructioil unit has been awarded a contract to build a clean-fuels project at one of the largest oil refineries in Germany Known grail1

Il.

a:, ,\uto tlw

Oil

prqcct

a\varded 10 the Fluor Daniel unit Oel Gmbl I. Germany’s refiner.

Prowas

refineries to produce new clean fuels and increase the yields and efficiencies of its plants. Approximately US$?ZO million will be invested at Tosco’s Ferndale Refinery in Bellingham, WashiIlgton. The bulk of this investment \n(ill be used to install a new state-ofthe-art Fluid Catalytic Cracker Unit (FCCU) which will improve gasoline productioil at the refinery by over 10% and reduce operating costs. In addition, over US$l50 million will be spent on projects at ToscoS Califbrnia refineries in the San Francisco Bay Area and Los Angeles which will increase clean product production at both refineries by a total of about IO 000 barrels

per

day.

KVAERNER DESIGNS FLOATING PLATFORM Kvaerner, the Anglo-Norwegian engineering and construction group, has been awarded the concept study contract for the Kristin field in the Norwe~iaiI Sea. The prqject embraces the dcielopmcnt of a semi-submersiblc l~roduct~~)ii plati’orln for the processing of gas and condensate. Statoil will operate the field. Work will start immediately on the project. together with CXA Consultants, at Kvaerner’s Lysaker office in Norway. The engineering work vl;ilI contmuc until March 2001, and Statoil will start inviting EPC’ tenders in the summer of 200 I.

by

Ruhi large”

TOSCO INVESTS IN CLEAN FUELS Tosco Corp is spending US%375 million over the next five years at its West Coast

AEC BEGINS FOSTER CREEK PROJECT Site construction for Alberta Energy Company’s lJSS230 miIlion steam-assisted gravity drainage (SACD) heavy oil project has been initiated following the recent regulatory

Analyst

approval from the Alberta Energy and Utilities Board and Alberta ~nvironn~ent. The Foster Creek thermal recovery pmject. located in the centre of the Primrose Air beapons Range. will be AEC’s first c~~lilni~rcial use of the steam-assisted gravity drainage technology to tap the t’ast heavy oil resources located under the Range. This initial phase is expected to recovi‘r reser-vcs of I40 million barrels. Inilial pro~iilcti(~ii of more than 20 000 barrels per day is expected to start in early 2002. Subsequent expansions could build total dally production to 100 000 barrels per day by 2~0~~20~7. At-C’s midstream division 1s also proceeding with its plans to develop a lfSS45 million, 52 kilometre pipeline system to tlelibcr the Foster Creek l~roducti~~n io AEC Pipelines’ Wolf Lake PLIIII~ Station south of the l’rili~i.os~ Kanee.

DENA SELECTS O&M CONTRACTOR A Duke/Fluor Daniel (D/FE)) affiliate has been awarded a five-year contract by Duke Energy North America (DENA) to provide operating plant services for four merchant power ~eneratioI1 facilities in California. UFll C‘alifornia Operations. will be responsible for the facilities‘ day-to-day operations. in~iiiltcii~tnce and outaw iiiatiageiiielit. The power plants. with a combined gcncr~~titi~ capacity of 335 I MW. ire hlorro Bay in San Luis Ohispo C’ounty, Moss Landing in Montcrcy (‘ounty. Oakland III Alameda County and

South

Bay

in San

Diego

c‘oLllli)l,

ABB TO BUILD GAS PLANT IN ALGERIA

US!%20MILLION BOILER PROJECT FOR POLAND

ABB has been awarded an order valued at US%574 million, together with Petrofac International Ltd, to design and build a natural gas processing plant for the Ohanet gas fields in Algeria.

The Babcock &Wilcox Compang has signed an engineerprocure-construct contract with Finland’s Fortum Engineering, through its Polish subsidiary, to supply a coalfired circulating fluidisedbed boiler island to the new Tychy II power plant project in Tych?; Poland.

The order was placed by a consortiuili led by Bl-IP Petroleum of Australia. Under the terms of the contract, ABB is responsible curement ttic plant. llntul-al

petroleum

company’:;

Industry

tbr the design. proand construction of vlhich will process gas im liyucfied gas I LPG) and COIN-

deiisatcs used in fuel, chemical feedstocks and other appltcations. The plant uill have an output of 30 400 barrels a day (b:d) ofcondensatc. 27 700 bid of LPG and 665 million cubic feet per day o~pil~~liiic quality gas. Production from the plant is expected to begin in late 1003.

TllC bed

cc~uivnlent

l;S$?O tures

lion

r1e\+

boiler

has to

million B&W’s internal

90

tluidisecl;I

capacity

MWe. The project hithird-g~nera-

recirculating t B&W IR-(‘1%) boiler design and also mcludcs construction and balance of boiler plant equipment. The B&W IR-C‘FI’r horler dc*ipn is ;I uriiquc twostage internal recirculation particle system that improves performance and rcduccs qcrating md mamtenancc costs.

Pump Industry Analyst

SNC-LAVALIN RE-POWERS SASKPOWER STATION

September 2000

BASF PETRONAS Chemicals Sdn Bhd for new facilities at a chemical plant in Pahang Darul Makmur, Malaysia. Under the lumpsum engineering, procurement and conSNC-Lavalin, in consortium struction contract, Kvaerner with Hitachi Ltd, has been will provide a new Butanediol awarded a turnkey contract plant and feedstock facility, in by Marubeni Canada to rem addition to upgrading the power SaskPower’s Queen Elexisting plant infrastructure, as izabeth Station at Saskatoon. well as port tankage, shiploadUnder a separate contract ing, drum-filling and truckwith SaskPower, SNC-Lavalin loading facilities. has been awarded the civil The feedstock technology works for the project. The total is from Huntsman, and the project value is C$l40 million, plant using techwith SNC-Lavalin’s portion at Butanediol nology has been developed by approximately C$42 million. Kvaerner. The basic engineerWork will be carried out by ing for both plants was inteSNC-Lavalin’s Vancouvergrated by Kvaerner and Huntsbased Thermal Power Division man. The contract is due for whose scope on the project completion in the second half includes overall plant design, of 2002. When fully operasupply of balance of plant, tional, the new plant will have civil works and all construction work. The project is to a capacity to produce 100 000 begin immediately and should tons per year of Butanediol be completed by mid-2002. equivalent. Equipment and materials will be sourced from within Malaysia and world300 MW POWER wide using Kvaerner’s global PLANT PLANNED procurement network.

NEAR CHICAGO

Site clearing has started at University Park Energy LLC’s US%130 million power plant located 30 miles south of Chicago. The Chicago-based engineering company Sargent & Lundy will supervise the engineering, procurement, and construction of the project. The 300 MW plant, with 12 Pratt and Whitney natural gasfired combustion turbines, will be in full operation by the summer of 200 1.

KVAERNER WINS MALAYSIAN CHEMICAL CONTRACT cvaerner, the Anglo-Norwe;ian engineering and con#truction Group, has signed a JSSlOO million contract with

and training and technical services. Start-up at Asia’s largest ammonia debottlenecking plan is scheduled for 2002.

LINDE WINS IRANIAN PLANT CONTRACT

Linde AG, Wiesbaden, will build the world’s largest olefin plant, worth E350 million, in the Iranian free trade zone of Bandar Imam on the Persian Gulf. The project was commissioned by the Iranian National Petrochemical Company. The plant will have an annual capacity of 1.1 million tons of ethylene and 200 000 tons of propylene. The order includes a natural gas separation plant which will supply the new olefin plant with ethane, propane and butane via a 100 kilometer-pipeline. This is the second order in just two years that Linde has received ’ for the construction of an KBR AWARDED olefin plant in Iran. Linde proDEBOTTLENECK vides the basic and detail engineering, equipment and techDEAL nical monitoring. The Kellogg Brown & Root assembly will be carried out (KBR) recently signed an by an Iranian company and the agreement with Yunnan Yunplant is scheduled to be comtianhua Co Ltd and its tradpleted in 2003. ing agent, the China National Chemical Construction CorBASF, PETROBRAS poration, to provide revamp licensing services for Asia’s TO BUILD largest ammonia debottleACRYLIC ACID necking project. COMPLEX The ammonia plant, located at Shuifu County in Yunnan BASF and the Brazilian Province, was started in 1977 state-owned oil and gas prowith a design capacity of 1000 ducer Petrobras are to carry metric ton per day (mtpd). out a feasibility study for a %ce completed the renovation slant for acrylic acid and vi11 increase the plant’s capacilerivative products. y to 1500 mtpd while decreasThe planned project is ng energy consumption. :xpected to cost around As part of the Yuntianhua JS$300 million and will have :ontract, KBR will provide its m annual capacity of 160 000 ‘evamp licensing expertise, netric tons of acrylic acid )asic engineering design, offmd acrylic acid derivative ihore equipment and materials, )roducts.

I1

FW TO DELIVER PLASMA DERIVATIVES FACILITY Bayer Biologicals Srl has awarded a contract to Foster Wheeler Italiana SpA and its subsidiary Steril SpA for a new plasma derivatives production facility to be built in Rosia, Italy. The project is valued at approximately US$70 million. Foster Wheeler is providing engineering, procurement, construction management and commissioning services for the project, which will be a secondary pharmaceutical manufacturing facility to fill and finish plasma derivatives. The project is expected to be completed in 2002. Preliminary engineering and other work on the project has already started.

GERMANS BUILD CONTAINER VESSELS Kvaerner Warnow in Rostack, Germany has won two new building contracts worth US$70 million from Oskar Wehr KG of Hamburg. The two Warnow CV2500 design vessels are due for comlletion in the fourth quarter of 200 1. With these two new con:racts, the order reserve at cvaerner’s German shipyard row stands at US%345 million. During 1997 and 1999, Lvaerner Warnow delivered ive vessels of the same basic esign. Two further type X2500 vessels, ordered by Ither German ship owners in ‘ebruary of this year, are curently under construction and re scheduled for delivery in he first half of 2001,

September 2000

Pump Industry Analyst

Ampco-Pittsburgh Corp, USA ‘refile Smpco-Pittsburgh operates in three business segments that manufacture and sell mainly custom-engineered equipment: Forged and Yast Rolls: Air and Liquid Processing; and Plastics Processing Machinery. The Air and Liquid Processing segment consists ot Zerofin, Buffalo Air Handling and Buffalo Pumps. Employing more than 100 people, Buffalo Pumps has been making centrifugal )umps for more than one hundred years. While the dcfence market is an important sector of the company‘s business. commercial jumps account for the ma.iority of sales. --___ -__ 4nalysis Salts for the Air and Liquid Processing segment were USS7 I .9 gains from the significant investments made In (‘NC‘ machinery million in I WY. LIP from USSh2.2 million in 1998, v,ith increaaduring 1999 and recent years. s reported at all operating locations. The increase in sales of ail handling systems and heat exchange coils reflects increased construction activity in the chemical, pharmaceutical, hospital and Continued gains in pump sales during the first six general industrial markets. Strength in the power generation months of 2000 have helped to offset lower revenues at Industry created improved demand for lube oil pumps used by the company’s air handling systems operation. Buffalo
____ Key Figures (US$ million) Ampco-Pittsburgh Corp

Year ended 1999

1998

211.8

187.9

173.9

162.4

143.8

22.8

23.2

22.0

18.1

14.2

15.1

15.7

16.5

12.4

-

235.8

211.8

196.8

188.2

171.4

-

1886

1350

1340

1225

1204

-. Net Sales Income from Operations Income from Continuing Total ____ Assets Number of Employees ____

Contact Details Ampco-l’ittsburgti Carp (‘hairman: President and CI:O: Address:

BuffAo Pun1ps Inc President: Address:

31 .12

1997

Operations

Louis Berkman Robert Paul 600 Grant Street :Suite 4600 Pittsburgh IPI I52 19 I. SA

Tel: + 1 412 456 4400 Fax: - 1 4 I2 4% 4404

(-‘harles Kistner 874 Oliver Street I\ Tonawanda NY 14210 IUS.

Tel: rl 716693 1850 Fax: +I 716 693 6303 Web: www.buffalopumps.com

_____ Recent Events In Xlay 2(~00. Buffalo Pumps announced that it had selected Bridgclogix to st~pply a new company-wide a mainframe based system. On 2 August 1999. Ampco-Pittsburgh acquired The Davy Roll Company Ltd of Gateshead UK l

1996

1995

__--__

9.1

EKP system. replacmg

September 2000

Pump Industry Analyst

Grundfos Group, Denmark Profile The Grundfos Group is a private company owned by the Poul Due Jensen Foundation. The main goal of the Foundation is to develap and expand the group, primarily by reinvesting its own funds earned from the manufacture and sale of pumps. In accordance with rhe founder’s wishes, the Foundation will use all means available to keep the Grundfos Group as an independent going concern. Analysis 1999 was a better year for Grundfos than the company had originally expected. Close to zero growth in the first three months of the year was followed by accelerated sales in the following nine months. Recovery in the Far East, Russia and Eastern Europe meant profitability exceeded budget for the year. Consolidated sales grew 8.3% from DKr7520 million in 1998 to DKr8145 million in 1999. Most of the group’s sales companies produced double-digit sales growth in 1999. Grundfos’s HVAC market segment achieved organic growth of 4% in 1999. Sales growth was strong in Southern and Central Europe, while in North America Grundfos achieved doubledigit growth rates, with sales in Asia showing momentum. Grundfos’s Industry segment saw 1999 sales grow 10%. Most regions and customer segments showed positive results, as a result of working more closely with customers. The Industrial product range mainly expanded within the water treatment and machine tool sectors. Highlights included the large multistage centrifugal pumps in the CR series and the launch of the CRT series. Grundfos’s Water Supply and Waste Water segment successfully entered into framework agreements with a number of major water supply and waste water companies. New products launched in 1999 included a wide range of

sewage pumps and systems, including contractors’ pumps and an extension of the non-industrial drainage pumps.

Gnmdfos is clearly going for growth. The company’s target of annual double-digit growth lies behind the recent spurt of acquisition activity including the Sarlin Pumps and Myson Pumps deals. Sarlin Pumps also opens new markets for Grundfos, allowing the company to move into the industrial waste water market. Recent initiatives, including a branding project designed to give Grundfos a clearer image and to position it as a high profile brand, the plan for the Paul Due Jensen Academy and the sharper focus on production and procurement in lowcost countries should drive growth rates even further. In targeting India, Brazil, Russia and China as new markets, Grtmdfos appears to be mapping a sound long term growth strategy. I

Key Figures (DKr million) Grundfos Group

Year ended

31 .12

1999

1998

1997

1996

1995

8145

7520

7212

6682

5787

606

578

568

491

462

Profit before Tax

476

495

472

389

338

Consolidated

291

315

258

223

220

336

324

307

289

260

9591

9305

9548

9154

8805

Net Turnover aperating

Profit

Profit after Tax

R&D Costs Number

of Employees

Contact Details Chairman and President: 4ddress:

Niels Due Jensen Paul Due Jensens Vej 7 8850 Bjerringbro Denmark

Tel: +45 86 68 14 00 Fax: +45 86 68 42 45 Web: www.grundfos.com

Recent Events 1 In June 2000, Grundfos completed the acquisition of Sarlin Pumps of Finland. Sarlin Pumps has subsidiaries in the UK, Spain, Poland and Estonia. The group had net sales of f35 million in 1999 and 250 employees. Sarlin’s main products include large submersible pumps, pumping stations and control and monitoring systems. 1 Grundfos acquired Myson Pumps, a division of the Baxi Group, in May 2000. Norfolk, UK-based Myson Pumps has 168 employees and has an annual turnover of &13 million. Approximately 90% of the company’s sales are generated in the UK, with the rest in Europe. This acquisition is based on Grundfos’s strategy of achieving double-digit growth every year. 1 Grundfos unveiled an ambitious training plan in early 2000 by establishing the Poul Due Jensen Academy. 1 At the start of 2000, Grundfos’s Swedish sales company acquired JL Pump Co AB, one of Sweden’s main distributors of waste water and sewage pumps. 1 Grundfos acquired Deutsche Vortex GmbH of Baden-Wiirttemberg from 1 January 1999. Deutsche Vortex is a specialist in small pumps for the circulation of hot water in private homes and small apartment buildings.

September

2000

f’ump

Idex Corp, USA

Key Figures (US$ million) Three months ended 30.6

2000

1999

Net Sales Of Which Pump Products

185.3

161.5

101.9

94.9

Cost of Sales

112.3

96.8 -

Gross Profit

72.9

64.7 -

Operating income Of Which: Pump Products

31.8

27.0 -

18.9

17.4

Net Income ____-

17.5

14.1 -

Net Sales Cost of Products

Sold

Gross Profit Operating

____ Net Sales Of Which: Pump Products Cost of Sales

____-

Gross Profit ____ Operating Income Of Which: Pump Products Net Income

Idex Corporation’s sales, net income and earnings per share for the three months ended 30 June 2000 were the highest for any quarter in its history and the company expects 2000 to be another record year. New orders for the quarter reached US$lSl million, a 12% improvement from the second quarter of last year and 6% lower than this year’s record first quarter. Order activity is traditionally strongest for Idex in its first quarter. As expected, the order backlog was reduced US$4 million during the second quarter. Idex ended the quarter with a typical unfilled order backlog of about l-1/3 months’ sales.

30.6

Profit

1999

361.9

1999

47.3

fl45.1

35.1

33.6 -___ 11.5

Six months

ended

5.2

--__

3.7 -.____

-__ 3.4

30.6 2000 -___-__ 95.6 ___-__

Sold

70.7

Gross Profit

24.9

318.0

Operating

12.3

200.9

189.2

Net Income

218.4

191.9

143.5

126.1

61.7

50.6

38.3

34.7

33.3

26.0

The acquisitions of FAST in June 1999, Ismatec in April 2000 and Trebor in May 2000 added 8% to second quarter sales and base business volume was up 9%. but foreign currency translation had a 2% negative effect. International sales were 4 1% of total sales, up from 38% in the same quarter of 1999. In the second quarter, international sales grew by 25%, while domestic sales increased by 9% compared with last year. CEO Dennis Williams said the important news was that Idex continued to show sales growth in its core businesses and improved operating margins. n

-___-___

5.8

Net Income

Cost of Products

2000

2000

12.2

Net Sales ended

Analyst

Gorman-Rupp Co, USA

Key Figures (USS million) Second quarter ended 30.6

Six months

Industry

Profit

The Gorman-Rupp Company reported an increase in net income of 24.3% on an 8.2% increase in net sales for the six months ended 30 June 2000 after posting record second quart& results. The backlog of unfilled orders increased by 45% over a year ago. Record results for the quarter ended 30 June 2000 included net sales of US$47.3 million and net income of US$3.7 million. Net sales for the six months ended 30 June 2000 amounted to US$95.6 million compared with US$88.3 million in 1999. Net income for the period was US$7.8 million, up from US$6.2 million a year earlier. Orders placed during the six months ended 30 June 2000 at Patterson Pump Company and at the

7.8

1999 88.3 _-__

__--__

65.5 22.8 -__ 9.7 6.2

Mansfield Division, principally accounted for the 45% increase in the backlog of unfilled orders. The company’s backlog of unfilled orders at 30 June 2000 was approximately US$72.5 million, an increase of US$22.4 million over the same period in 1999. Entering the third quarter the company remains optimistic that 2000 will be another good year. GormanRupp says it is encouraged by the incoming order rate in the water and wastewater markets, while sales to the fire, construction rental equipment and international markets have been above last year’s levels. Shipments of fabricated components to GE Power systems remains on schedule, as part of the US$60 million contract previously announced. q

September2000

Pump Industry Analyst

Pentair Inc, USA

Grace Inc, USA

Key Figures (US$ million) Three months ended

Key Figures (US$ million) Second quarter ended 30.6.2000

1.7.2000

25.6.1999

130.2

114.7

64.1

55.1

Cost of Goods

Gross Profit

66.1

59.6

Gross Profit

Operating

30.0

26.3

R&D

18.3

18.0

Operating

Net Sales Cost of Products

Sold

Profit

Net Earnings Six months

Net Sales Cost of Products

Sold

Gross Profit Operating

Profit

Net Earnings

Net Sales Sold

Income

Net Income

ended 30.6.2000

1

Six months

25.6.1999

26.6.1999

781.9

507.2

554.5

347.2

227.4

160.0

8.9

6.1

77.6

51.6

36.6

28.3

ended

250.4

217.9

1.7.2000

122.2

105.5

Net sales

1494.2

977.7

128.2

112.5

Cost of Goods Sold

1048.6

667.9

54.7

45.6

Gross Profit

445.6

309.8

33.3

29.2

R&D Operating

Income

Net Income

26.6.1999

18.9

12.1

152.2

60.0

70.5

30.5

L

sraco has achieved .a 13% ncrease in second quarter let sales, and a 2% rise in secondquarter net earnings m last year. Net sales of JS$130.2 million were 13% righer than the US$114.7 nillion reported in the secmd quarter of 1999. Second quarter net sales and net :amings were both records ‘or the quarter and were also he highest quarterly net ;ales and net earnings in jraco’s history. Worldwide, Contractor equipment sales increased 30% from last year’s second quarter, lead by strong new product salesof paint sprayers as well as higher parts and accessoriessales.Industrial/ Automotive Equipment sales increased I%, with higher demand for industrial finishing, protective coatings and diaphragm pump products offset by lower product sales to automotive plants. / :Lubrication Equipment sales declined 3%. Second quarter sales in

I:

I ’

the Americas increased 19% to US$96.8 million. In Europe, salesin local currencies increased 12% and reported sales of US$20.9 million were flat after the negative impact of currency translations. In the Asia Pacific region, salesin local currencies declined 5% and reported sales of US$12.5 million were flat after the positive impact of currency translations. CEO George Aristides said that as Grace enters the third quarter, the company is keeping a cautious eye on the global economies. “While Grace’s business has been strong in the first half of 2000, it is prudent to plan for a slowing in North America to occur during the second half of the year. Notwithstanding this cautious outlook, our confidence in delivering improved earnings and salesperformance versus last year remains high,“says Aristides. l

Pentair’ssecond quarter results were in line with their earnings shortfall warning issuedin July (seePump Industry Analyst, August 2000). Overall strong results at Pentair’s Water and Enclosures groups partially offset the lower-than-expectedperformance of the Tools and Equipment groups. “We still have work to do as we revitalise the tools and equipment businesses,but we have identified the problems that caused the operating shortfall,” said Randall Hogan, president and chief operating officer. “We are taking immediate remedial actions. Market demand for our tools and equipment products remains good, and we see a continuation of core growth oven as we proceed in the implementation of aggressive actions to return the businessesto their traditional high levels of performance.” Hogan said the company had put into effect a number

of measures designed to return Pentair’s tools and equipment businesses to their previous standard of operating performance. These include strengthening leadership, tightening controls and reducing costs,partitularly in distribution, selling, and materials. During the second quarter,’ Pentair reorganised the tools businessesinto a Tools Group (Porter-Cable/Delta, DeVilbiss Air Power) and an Equipment Group (Century, Lincoln Automotive and the Lincoln Industrial operation that was transferred from the WaterTechnologiesGroup). The company’s Water Technologies Group revenues increased 110% and operating income gained 136% in the second quarter of 2000, with strong performantes recorded in the pump, water storage and pool and spa sectors of the business, both in North America and abroad. R

September

2000

Pump

Crane Co, USA

Key Figures (US$ million) Second quarter ended 30.6

2000

Operating Profit Of Which: Fluid Handling

387.9

405.3

117.0

131.6

-

54.9

Net Income Six months Net Sales Of Which: Fluid Handling Operating Profit Of Which: Fluid Handling

-

Net Income

While Crane’s Fluid Handling salesdeclined US$14.7 million, or ll%, to US$I 17.0 million for the secondquarter of 2000 compared with the second quarter of 1999, operating profit increasedUS$5.0 million, or 11l%, to US$9.5 million. Four of the five businessesreported higher profits and all five reported improved operating margins. Commercial Valves’ operating profit improved by US$3.9 million to US$l.S million on a US$5.7 million, or a 19%, sales reduction to US$24.7 million. Engineered Valves’ operating profit increased US$l .Omillion to US$ 1.9 milhon on a US$2.0 million decrease in salesto US$25.0 million, as a result of increased shipments of high-margin pressure-sealvalves to the power generation market and from the closure of a steel valve

ended

Analyst

ITT Industries Inc, USA

Key Figures (US$ million) Three months ended 30.6

Net Sales Of Which: Fluid Handling

Industry

57.5 -

9.5

4.5

47.8

39.3

Revenues Of Which: Pumps & Complementary Products Specialty Products Operating

Income

1999

1223.6

1187.2

447.0 256.3

441.3 246.8

142.8

128.3

Net Income

30.6

70.2 ___-.-~ Six months

2000

1999

771.7

805.3

234.5

260.9

102.9

110.4

17.5

10.1

Operating

75.5

73.0

Net income

facility in the UK. The segment’s order backlog increasedby US$5.0 million to US$83.3 million on the end of last year, led by the continuing strong demand from the power generation and the improving marine markets. Crane’s financial position remains strong with net debt to capital at 30.9%. During the first six months of 2000, the company paid US$49.4 million for the repurchase of 2.4 million shares of Crane common stock at an average price of US$20.78 per share and US$l2.2 million for the payment of dividends. Debt repayment totaled US$39.8 million. Average diluted sharesoutstanding decreased by 7.2 million from the second quarter of 1999 due to the company’s share repurchaseprogramme. n

2000

Revenues Of Which: Pumps & Complementary Products Specialty Products income

Despite reports that the US economy may be cooling, Travis Engen, chairman and CEO of ITT Industries, says his company is on track to meet all of its financial goals for 2000 and to continueeamings momentum in 2001 consistentwith establishedtargets. “We are proud of the continued operational improvements that allowed us to achieve record high profitability for this quarter, with significant margin gains in both our Pumpsand Connectors and Switchessegments,” said Engen. The company remains committed to growing its top line through internal development and acquisitions and has introduced Value-Based Six Sigma to accelerate internal growth and improve productivity. Pumps and Complementary Products reported sec-

ended

63.3

30.6 2000

1999

2428.9

2274.8

878.7 521.3

842.8 __~486.8

259.4

218.0

121.5

105.8

ond quarter revenues of US$447.0 million, an increase of US$5.7 million or 1%. Continued strong performance by the water/ wastewater sector was partially offset by softnessin the chemical processpump market. Operating income for the second quarter increased by 17% over last year, to US$50.4 million, and operating margin jumped I.6 percentage points to a record high for this segment, reflecting more favorable mix and lower cost structures achieved through cost reduction initiatives. For the second half of 2000, the outlook remains positive within the water management and construction sectors. Within the industrial pumps sector, the company intends to focus on continuing to improve performance amid continued soft market conditions. n

Pump Industry Analyst

PCC SPLITS STOCK Precision Castparts Carp’s board of directors has approved a two-for-one split of its common stock in the form of a stock dividend. William McCormick, chairman and chief executive officer of PCC, announced the stock split at the annual shareholders meeting in Portland Oregon. Shareholders will receive one additional share of common stock for each share of common stock held on the record date. The new shares will be issued on 21 September 2000, to shareholders of record as of 1 September 2000. “This split, the first in six years, is intended to increase the stock’s trading liquidity and should help to create a broader base of ownership in PCC,” said McCormick. “We have achieved excellent sales and earnings growth for the past two quarters, and we have forecast continuing growth for the balance of fiscal 2001.” As of 2 July 2000, PCC had approximately 25 million shares of common stock outstanding.

IT DRIVE AT WEIR Weir Group executive director Kevin Gamble predicts that the development and application of information technology will herald a revolution in how businesses in the Weir Group operate in the future. Gamble is spearheading the Weir drive to develop systems and ensure that all subsidiaries get the maximum benefit from the application of new technologies. Speaking at a specially convened conference at the Huddersfield valvemaker Hopkinsons, which was attended by IT specialists from Weir Group businesses in Europe, Gamble said IT meant

September 2000

growth rather than decline and that Weir must grow if it is to remain successful. “IT will have a massive influence on our business - and we must take major steps forward to keep us in advance of our competitors in a highly competitive market place,” said Gamble. The acquisition of Warman was an important factor in the decision to fast forward the IT initiative for Weir. Warman, with a European base in Todmorden, UK, brought a global IT infrastructure using Lotus Notes.

l

l

ACQUISITIONS BOOST TI GROUP UK-based TI Group reported strong results for the six months to 30 June 2000 with sales up 35% to El679 million and profit before tax, goodwill and exceptional items up 12% to $146.5 million. Although revenue was down at John Crane, due largely to weak process markets and delivery phasing in the marine business, overall the division is well positioned to continue to gain market share and to resume growth as the process industry recovers. Sales were down 5% at E324.8 million, with operating profits down 16% at &30.9 million reflecting pricing pressure in the current industrial markets. The acquisitions made in the last two years have increased John Crane’s addressable markets to over &4 billion. Tl Group Specialty Polymer Products performed strongly, benefiting from an improved marketing culture and branding, from further globalisation of its product range, and from the acquisition of Busak+Shamban in October 1999. Sales were up 66% at f214.6 million and operating profit was up 73%, in line with expectations, at E31.2 million.

l

l

l

l

l

Pentair has raised its quarterly dividend rate by 6% to LJS$O.17 per share from USSO.16. This cash dividend is payable on 11 August 2000 to shareholders of record at the close of business on 28 July 2000. The board of directors of Grace has declared a regular quarterly dividend of US$O. 14 per common share payable on 2 August 2000 to shareholders of record at the close of business on 17 July 2000. The company has approximately 20.2 million shares outstanding. Idex’s board of directors has declared a regular quarterly dividend of US$O.14 per common share. The cash dividend will be paid on 31 July 2000, to shareholders of record on I7 July 2000. Robbins Sr Myers’ board of directors approved the regular quarterly dividend payment of US$O.O55 per share for the third quarter of fiscal 2000. Shareholders of record as of 10 July 2000 received payment on 3 1 July 2000. The board of directors of ITT Industries has declared a cash dividend of USSO. per share for the third quarter of 2000, payable on 1 October 2000, to shareholders of record on 25 August 2000. The board of directors of United Dominion Industries has declared a third quarter cash dividend of US$O.l 1 per share. The third quarter dividend will be paid on 30 September to shareholders of record on I September. Halliburton’s third quarter dividend of US$O. 125 a share on the company’s common stock is payable on 27 September 2000 to shareholders of record at the close of business on 6 September 2000.

l

l

l

l

l

l

Sulzer has launched a convertible bond issue through its wholly owned subsidiary Sulzer Capital BV in the Netherlands, The lead manager for the issue is UBS Warburg. The proceeds of more than SFr200 million are earmarked to provide permanent financing of the acquisition of Ahlstrom Pumps Corporation, a tramaction that closed on 31 May 2000. The underlying 160 000 Registered Shares of Sulzer Ltd have been purchased on the open market during the course of this year. South Africa’s Orbit Pump Manufacturing has achieved IS0 9002 accreditation. Managing director Richard Rudling says that the IS0 9002 certification applies from the time of raw material receipt to the installation and commissioning of the certified pump. Grundfos Pumps Corporation has received IS0 14001 registration for its Fresno, California, manufacturing facility. UK sealing company AES Engineering Ltd of Rotherham has won the NatwestSunday Times Company of Tomorrow Award. The competition is open to any UK company with a turnover of at least f. I million. ProMinent’s new Chinese headquarters in Dalian has recently opened with IO 000 sq m of office and production space. ProMinent China currently employs more man I20 people. Howden Pumps is to distribute and market Nocchi pumps in South Africa. The Italian pump company’s plants in Brescia, Lugano, Milan and Moscow produce more than 5000 water pumps daily.

,

’

’ (

September

2000

Pump

Industry

Analyst

ORDERS I .

Glaxo U’elhne Manufacturing Ptc Ltd in Singapore has placed an order fat, a SIHI dry vacuum pump with

Sterling Fluid (Asia). The SlHl

Systems

dry ijill handle solvents such as acetone. methanol. ethyl acetate, ethanol. IP.4C and MIHK and complies with Glaxo Wcllcome’s requil-cmerits for a p~itllp that mi operate 111 a zone I ha/nrdous area with gases of thy type Group I I B and Mith ;I Temperature Class T3.

. Voith

Siemens Po\*er Generation.

Hydro the ticn

joint \ cntttre het\\een Voith and Sicmcns. has \\on t\\o major orders in Portugal. The fin-st order I\ Ihr IY~O pttmpcd >toragc 5cts lot Venda No\a II hydra powct stallr,tl. located approk Imatelq 10 km bouth-east s~)t Braga anll scheduled [;)I start-up III 2003. The Ias1 time G)ith recci\ed a cotitract of this magnitude fro ii Portugal MLIX o\cr 40 yem ago Each machine 5ct ha\ ;tn output nf 92.5 MW art1 log&etthey will gcnera.c 120 (iU’h ant~ttc~ll\. The nc,\ .ioiiit Lcntttrc is also 5ttppl!,~ng I\\0 radial pumps li)r tl-‘c in irrtgation s~stclll Alqu~\e-Alamos. approximatcly 30 km north-cast (11‘ I
order\ pt~mps l

pLllllp’~

and

fOllOW-up

fog another fott~. arc likclb. BHEL, IlJS secured .I turnkey orcicr from [ndian Oil C’orporation (IX) for .I RIOOI) millton. 20 MW cogcneratton powetplant 91 IOC‘s Dighoi Refinery conplcx in 4ss.m~. The scope 01’ the prolcct involve the

.

manufacture, supply, erection and commissioning of a 20 MW (Frame 5) Gas Turbine Generator and Heat Reco\ cry Steam Generator (HRSG) of 100 tons per hour capacity with associated auxilliarics and plant equipment. Kyocera America IIIC has selected a Nordson subsidiary to equip its neu 6600 square foot flip chip asscmhly facility in San Diego. California. Asymtek will be the primary vendor tbr Kyocera’s underfill dispcnsing needs. Kyocera selected Asymtek’s Automove .46 I XC dispenser with the DC’ 6000 rotary positike displacement pump to dispense solder paste for chip capacitors. T\vo Asytntck Millennurn M-620 dispensing systurns accompanied \vith DP-3000 linear pumps ha\e also been pttrchased for the ttnderfill operation. as ~‘cll as a third Millennium M-630 dual-action system configurcd with a DV-6000 rotary’ positive displacement pump and a DP-3000 pump fi)t dispensing both lid seal and thermal compounds. Weir Pumps is to supply pumping equipment \vorth over El I million to pouet plants in the Far and Middle East under two orders placed by ABB Alstotn Polvcr. The company is to supply a package of boiler feed and cotidensate extraction pumps to Manjung coal-fired power station in Malaysia and Shoaiba oil-fired poser station in Saudi Arabia. The boiler feed pumps for Man.jttng arc from Wcit-‘s barrel casing range and arc identtcal to units recently supplied tbr the Ghazlan project in Saudi Arabia, under a contract placed by Mitsubishi Iica\:y Industries of Japan. In Saudi Arabia. the Weit

l

cqttipmcnt is needed for phase one of the Shoaiba projecl. I20 km south of Jeddah. lvhich consists ot three oil-fired units, each with an output capacity of 363 MI+: A further two identical unils are planned. whtch \zill result in a total po\\er output of I8 I.5 MW. Deliver& will start this summet-. CVorldW’ater Corp is tnvol\ed in efforts to tackle the sc\‘ere drought in Pakistan 11hich threatens 2lS much as 5O”G of the livcstock. The company has signed contracts to establish drinking crater stations in the six million acre area of the C‘holistan Desert to help sa\ c the herdsmcn and cattle stranded under drought conditions. Ihc signed agrccmenlb arc’ I~> the C‘holistnn Dccelopment Authority (C‘D;I) and the Punjab Rangers (Border Police) nith WorldWatcr Pakistan (P\,t) Ltd. :I uholly o\zncd suhsidiar>. The work is schcdulctt to start tmmediatcly IC ith hydrogcological studies fi)tlo\ced by drilling as rcqttircd and installations 01‘ WorldWatcrbs AqttaSafc and ,ZqttaMax solar pumps. Undixr the agrccmcnt wilh the (‘D.4. the first fi\r sweet (potahlc) lvatcr \zetls \zhich already cYt5t in the desert undet- the authority \\ ill be cqttippcd immcdiatclq \i ith solar pumps. and Hcpworth Minerals Chemical\ Ltd has installed three Svedala slurry pumps at Lcztale Quarry neat Kings Lynn in the UK. The quart-y pt-educes silica sand for the clear glass container industry. .2n alteration to the prodttction process to achic\,e a slightly different spectl‘icatton required three extra pumps to handle diffcrent Fradea 01‘ sands.

l

Danish Prtme Minister Poul Nyrttp Rasmussen was pre sent at the official opening of at1 extension to Grundfos‘s C’htnese production company in Suzhou. The extension doubles Grundt&B production capactty in China. The factory in Suzhott currently employs 160 people. This is expected to increase to 300 by 2002. Sulzer has cut its 10% stake in the Voith Stttrer Paper Tcchnologq GmbH .joint vcntttrc to IO’%. The move retlcctc Sulzer’\ strategic focus on its core activities.

Hyundai dustries‘

Heavy

In-

Maritime Kehcarch Institute and Engine & &lachinery Division have recently gained the tcchnology to predict the perforniancc of‘ large pumps. ARB ts combining its UK atttot~~i~tton and instrumennation compa~~~es. The new combtned opetalton will be kno\z n ah ABB Automation Ltd and \3.111 employ I600 peoptc. It \\ill bc it single sotircc of‘ supply tbr process 1tistrittilclitati011 and control. analytical products and syslt31lh. motor\ and drives. indttstt-tal robot\. iurhochat-ger\ and industryspeci l‘tc aulotnat 1011 solutiona.

* Weir Engineering

i

’ ~ ~

Services

has sponsored ;I cotnprtitton for (ila5go\+ Art School stitdents lo depict the business x11\ ittcs 01‘ the company. t~nnl )car student Ccctlia Lindholm’s winning portlb110 01‘ colour photos. whtch v,et-c taken at M&r’s m;un GlasgoM plant and customel-s’ \itcs. will no\+ bc displayed at WES’s UK network 01‘ 5cr\ tee ccntrcs. Lindhotm \von t300 and a \ccck-tong residency at ststct iolllpall) Peacock in (‘anada on anothct tndustrtal photography collltlllsstl)tl.

Pump Industry Analyst

September 2000

PEOPLE With Dick Cheney heading for the US presidential campaign trail as George W Bush’s running mate, the Halliburton board has accepted Cheney’s resignation as chairman and CEO. David Lesar, 47, is the new chairman of the board, president and CEO of Halliburton. Lesar, currently the company’s president and chief operating officer, joined Halliburton in 1993 as executive vice president and chief financial officer of the Halliburton Energy Services business unit. 0 Sam Licavoli has been named chairman, president and CEO of Textron’s US$3 billion Industrial Products group, which includes Textron Fluid and Power Systems Licavoli was previously chairman, president and CEO of Textron Automotive. Ned Cunningham has been promoted to president and chief operating officer of the Nash Engineering Company. Cunningham, who was most recently president of standard products and paper systems, will be responsible for all operating functions including manufacturing, aftermarket, paper, sales, marketing and engineering as well as international operations. Gareth Thomas, business and new product development manager of Mono Pumps in Manchester, has been appointed deputy chairman of the UK’s Pump Centre in Cranfield. Following the recent appointment of Bob Anderson as ITT Flygt’s regional director for Europe, Gordon Bigam succeeds him as managing director of Flygt in the UK and Ireland. Bigam joined Flygt in 1988 as contracts manager, moving to the position of marketing director in early l

l

l

l

l

l

l

l

l

1995, becoming deputy managing director in 1998. Flygt’s European managing directors will now report to Anderson, who in turn reports to Flygt AB’s group executive management and president Anders Hallberg. 1 The French pump manufacturer Salmson has sent sales technician Gregory Quelin to South Africa for 15 months to assist with the promotion of the Salmson range of pumps in South Africa. The appointment is part of an agreement to strengthen ties between Salmson and Howden Pumps. Sean Clancy has been named vice president, communications for Flowserve Corp. Clancy joins Flowserve from Union Carbide Corp, where he had been director of corporate communications since 1998. ITT Industries Inc has elected Raymond LeBoeuf to its board of directors. LeBoeuf is chairman and chief executive officer of Pittsburgh-based materials company PPG Industries Inc. Michael Wiley, 49, is the new chairman, president, and chief executive officer of Baker Hughes Inc. The appointment concludes the company’s search for a new CEO, which began in February 2000. Wiley was president and chief operating officer of Atlantic Richfield Company (ARCO) until completion of its sale to BPAmoco in May 2000. Diane Schumacher has joined Gardner Denver’s board of directors. Schumacher has served as senior vice president, general counsel and secretary of Cooper Industries Inc, a manufacturer of electrical products and tools and hardware, since 1995.

E-BUSINE 8 ISSUES l

l

Pentair’s Water Technologies Group has launched an e-commerce web site to increase its water puritication business in the rapidlygrowing economies of Asia. The web site, called ewatershop India, can be found at www.e-watershop.com, and is designed to be an electronic shopping store for Pentair’s water products, including water softener valves, pressure tanks, filters, pumps and reverse osmosis membranes and housings. Pentair already has a significant share of the market in India and has a manufacturing facility in Goa. Expecting strong initial success for ewatershop India, Pentair is planning to launch a second e-watershop in the Autumn to serve Taiwan, China and Southeast Asia. The web site, e-watershop Asia, will be available to customers in traditional Chinese, simplified Chinese and English. This site will support a new distribution centre that the company will also open in Taiwan later this year. Pentair’s new market initiatives are key elements of its strategy to increase revenues for the Water Technologies Group from Asia by US$lSO million in the next two to three years. Pentair also plans to open an e-commerce web site in Italy to expand business for the Water Technologies Group in Europe. This site will complement Pentair’s distribution centre in Milan. It will offer products and services in several languages to meet the needs of customers throughout Europe. The site, e-watershop Europe. is expected to be operational by the end of the year. In an expansion of its ebusiness strategy, Textron has invested US$25 million

l

l

in EqualFooting.com, a B2B online marketplace offering purchasing, financing and shipping aimed at small businesses primarily in the manufacturing and construction industries. Textron will use EqualFooting’s technological capabilities and experience to create targeted Internet applications for buying and selling goods online. Selling opportunities will be explored both through the existing EqualFooting.com marketplace and by developing Textronbranded sites powered EqualFooting.com’s by technology. BigMachines.com co-sponsored the first annual ebusiness for engineered systems workshop in Foster City, California during July. Attendees had the opportunity to learn about e-business strategies and technologies, and how they are currently impacting and will continue to shape the future of the industrial machinery industry. Twelve major oilfield services firms have formed a joint venture company, OFS Portal, to provide customers with a single source of standardised electronic catalog and service agreement information for upstream products and services. The firms are ABB, Baker Hughes, BJ Services, Cooper Cameron, ENSCO, FMC, Halliburton, National Oilwell, Schlumberger, Smith International, Transocean Sedco Forex and Weatherford. The plan is for OFS Portal services to be available worldwide to all customers, either individually or through B2B exchanges, As a not-forprofit independent service, OFS Portal would format and publish standardised content and enable subscription by users.

September

2000

Pump

GSW INVESTIGATES FRAUD CSW Inc has uncovered fraudulent activities at its Pump Division in Conway, Arkansas. The Canadian parent pany says these activities to the misappropriation

comrelate of

assets and the misrepresenration of financial information. It is estimated that the financial impact of these events amount to an unreported after tax loss of CS7.7 million. A formal investigation is currently underway and it is cxpccted that a portion be reco\ ercd

of the

loss

will

TOKHEIM DELISTED FROM NYSE The New York Stock Exchange (NYSE) has SUFpended trading in Tokheim’s common stock, because the company continues to fall short of the recently amended NYSE continued listing standards. As

a result. on I3 .luly 2000. the petrol pump mantafacturers’ common stock began trading on the OTC Bulletin Board under the symbol TOKM. Tokhcim8 inability to meet the recently amended continued listing standards of the N\r’St wa5 first announceld in February 2000. The NYSI-. had prc\ iously accepted a plan pro\ idcd by the company that would h‘i\c brought it into conformit) with continued standal-& but Tokhcim been unable 10 complete tain aspects of that plan.

listing ha:; cer-

SULZER ORDER INTAKE SHOWS STEADY RISE Consolidated order intake b> the Sulxer Corporation for the first half of 2000 rose by 5% to SFr2874 million.

The increase when adjusted for acquisitions and divestitures was 10%. This positive development was particularly due to greater demand in the textile sector, a gradual market recovery in most industrial divisions, and continued growth of Sulzer Medica sales. Orders received by Sulzer Industries totaled SFr2 198 million at mid-year, 29/o higher than for the first half of 1999. The increase comparable adjusted for divestitures and acquisitions was IO’%,. of which 4% is attributable to curSulrcr rency translations. Pumps SFr355

order intake rose to million, an I I (“0

increase favorably influenced by the new joint venture \vith Dalian Pumps in China and by currency effects. The figures do not include Ahlstrom Pumps, which will be consolidated in the second half-year.

MET-PRO BOOKINGS RISE 15% Record high bookings dro1.e Met-Pro’s backlog of orders received and released for manufacturing up 34% for the five month period ended 30 June 2000. The majority of the current backlog of these orders will be shipped in the third and fourth quarter of this fiscal year. MetPro’s bookings for the five month period were in excess of US$35 million compared with US$30 million for the same period last year. If this trend continues as expected, anmalised bookings look set to exceed US$84 million for this fiscal year. William Kacin, Met-Pro chairman and CEO. said quotation activity for capital equipment in both the domestic and international markets remained high and the company is optimistic that it will see a continued improvement in sales and earnings for the remainder 01‘ the year.

I nduxtry

Analyst

INDIA PROMOTES SOLAR PUMPS India’s Ministry of Non-Conventional Energy Sources is implementing a programme for the deployment of solar photovoltaic pumping systems for agriculture and related uses including drinking water supply. Subsidies and soft loans arc provided by the Ministry under the scheme. In addition. the Department of Drinking Water Supply is installing solar PV kvater pumping systems for drinking water supply in some rural areas. Under the Drinking Water Mission, more than 300 solar PV Mater pumping systcms have been installed in India. The Ministry of NonConventional Energy Sources is also runnmg a programme to demonstrate water pumping \iindmills t’or water lifting applications including drinking Mater supply. The programme 15 implemented the State Nodal Agencies. The Ministry 1°C). \,ides a subsidy of Rs20 000-45 000 per wind pump.

l

The tional range

Pump

Users

Interna-

Forum 3000 of technical

offers a papers.

workshops and training seminars. along Lvith a technical exhibition. Hydraulic Life Cycle

The Europump Institute Guide C‘ost Analysis

and to for

Pumping SyGenis will be presented to the public for the first time at the Karlsruhe event. For further details, please contact Christoph the VDhlA. ‘Tel: +-I!, 69 6603

Smgriin 1293

at

Flygt’s

lished

l

l

l

recently Sustainability

pubReport

is available at M ww. fly&t. corn. Sustainability, as defined by the Brundtland Commission. “meets the needs of the present without compromising the ability 01 fliturc generations to meet thrir own needs”. In the IJK. Pullen Pumps has hcen preaentcd with a Small Business Service Smart Aitard at a ceremony at City L’nlversitl. London. The Smart Award rccognised Pullen Pumps’ design and dcvrlopment of energy sa\ ing pump controllers usmg \ariablc speed invertcr technology. French centrif@d pump manufacturer Peme Gourdin is no\+ reglstercd as IS0 000 I I~\_ Llovd‘s Register _ Quality .\ssurance. On ;I \ islt from

Romanra

Raker

Centrilift’s

Hughes

to

European and African hcadquarters m Abcrdrcn. Scotland Dr Valentin Dumitrti. head ofpctrorn’s artificial lift systems production division, gained firit hand experience

PUMP FORUM ADDRESSES LIFE CYCLE COST ISSUES Life cycle costs will be top of the agenda when the pump world comes together at the Pump Users International Forum from lo-12 October 2000 in Karlsruhe, Germany.

ITT

of techniques used to maxiniisc I-tinlifc ti-oni electrical submerslblr pumps (ESPs). l

Vivendi

Environnement’s

dclaycd initial public offct-ing (IPO) Einally tooh place in .lul\ \+hcn sharch started 011 hC Paris trading cuchangc. On the first day of trading. the shares closed at f.33.XX. up 4.75’; on the Ei?.iO IPO price. ) American \ttrdent Ashley Mulro! has won the International Stockholm .lunior Watci- l’rl7t’. Mulroy‘s project was entitled ( ‘o/.,r/rr/hg K~~~llhi Ifrtihiolrc~ (‘orrttrirrir,trlic/tl in I’r~hllc~ lli/f<,/. I(J ih<~ /)/XX Re.srv1~111(“ of Es~h”rc~llru C’oli. The Stockholm Stinior Water Pri/e 1s sponsored (rloballc by ITT Industries. t

1

September 2000

Pump Industry Analyst

MARKET REPORT: World Pumps World demand for fluid han- I I nost cases they hold better dling pumps is projected to I growth prospects than those of t he industrialised nations. increase 6.8% annually 2004 (including In terms of products, centhrough price increases), reaching rifngal pumps will continue to over US$41 billion. )e the most commonly used According to Wovld ype of pump, because of their vide pressure and load handling Pulrzps, a new study from The :apabilities, including their abilFreedonia Group Inc, the developing regions of Latin ty to handle liquids with a high ;olids content and relatively low America and Africa/Middle naintenance costs. Freedonia East, along with the transition economies of Eastern Europe, :xpects positive displacement will provide the best opportu)umps to post the healthiest nities for growth in pump ;ains of any major product type, demand through 2004. As iue to strong growth in demand these areas continue to indus‘or diaphragm pumps. trialise and build pump-using As fluid handling technolprocess manufacturing, public )gy is relatively mature, prodict innovation within the secutilities and construction sectors, the demand for pumps or tends to be evolutionary. continues to rise. Most Asian Although many fluid handling nations will also post healthy jumps are considered comadvances in pump demand nodity-like in nature, marketdue to the ongoing industriali:xpanding product innovation sation of the region and recov:ontinues to take place in areas ;uch as materials. Freedonia ery from the Asian financial crisis of 1997. North America, :ays that injection-molded Western Europe and the Asia hermoplastics, for example, Pacific region will continue to ire finding greater use in be the largest and best devellump applications due to their oped markets for fluid hanmproved strength and corrodling pumps. These markets ;ion resistance. also tend to be mature and World Pumps, published in highly cyclical. The developAugust 2000, is available for ing regions of Africa/Middle US$4600 from The FreedoEast, Asia and Latin America, nia Group Inc, 767 Beta along with the transition Drive, Cleveland, Ohio economies of Eastern Europe, 44143-2326, USA. comprise generally smaller, Tel: + 1 440 684 9600 less advanced pump markets, Fax: +I 440 646 0484 but Freedonia believes that in

Ih

World

Pump

World Of Which: USA Latin America Western Europe Eastern Europe China Japan Source: The Freedonia

Demand

(USS million) 1999

2004

29 645

41 175

4270 1505 9905 1850 3600 1475

5395 2300 12 750 2630 5950 2000

Group Inc.

ECONOMIC REVIEW In the first five months of 2000, the current account of the euro zone recorded a deficit of E11.7 billion, compared with a surplus of e9.6 billion for the same period last year. This was mainly due to a lower goods surplus (E20.2 billion, down from E35.3 billion). combined with a rise in the deficit on services (E6.7 billion, up from f2.9 billion), while the deficits on income and current transfers registered smaller increases of El .9 billion and GO.4 billion respectively. Although the value of exports of goods grew strongly during the first five months of this year, rising by E73.2 billion or 24% relative to the corresponding period last year, the value of imports rose even more rapidly, increasing by E88.4 billion or 33%. The strong growth in the value of goods imported has been fostered by rising import prices, which reflect both higher oil prices and the depreciation of the euro, while the increase in the value of exports seems mainly to reflect rising export volumes. In May 2000, the net balance on the capital account declined marginally to CO.6 billion, compared with El.4 billion in May 1999. Between January and May this year, the capital account registered a surplus of f5.0 billion, compared with f4.7 billion in the corresponding months of last year. The euro zone’s current account had a deficit of E0.6 billion in May 2000 lower than the E 1.5 billion deficit recorded in May 1999. This change was due to decreases in the deficit in the income and curreny transfer accounts. Both direct and portfolio investment recorded net outflows in May 2000, adding up to a combined net outflow of f15.8 billion. Net direct

investment outflows accounted for E10.7 billion. E6.2 billion were equity capital outflows and reinvested earnings, while outflows of other capital, which comprises mostly inter-company loans, amounted to E4.5 billion. Source:

European

Central

Bank.

EXCHANGE RATES AGAINST THE US DOLLAR Date: 4 August 2000 COUNTRY

RATE

Australia

A$1.71

Austria

Sch15.14

Belgium

BFr44.40

Canada

C$1.49

China

Rmb8.28

Denmark

DKr8.21

Finland

FM6.54

France

FFr7.22

Germany

DM2.15

India

Rs45.43

Italy

L2131.05

Japan

T108.43

Malaysia

Rt3.80

Netherlands

F12.43

Norway

NKr8.9 1

Philippines

Peso44.70

Singapore

S$1.72

South Africa

R6.96

South Korea

Won1 115.50

Spain

Pta183.12

Sweden

X1.9.24

Switzerland

SFrl.70

Taiwan

T$31.05

Thailand

Bt40.65

UK

&0.66

USA

US$l.OO

Euro

El.10

:

1

oml Fax: +Bli !!3&33O Web: ~.spea~~ad. co.lJk 6-8 oz2tQbw 2mo

3-5 0GtobGpr2000 Abe&&%? Scotland Intefn

PRIORITY

FOnrm Contact: VDNlA TBf:+4969$6031281 Fax: +4Q 69 66 031690 Web: www.pu.vdma.org

ilter Freeman France Tel:+33 145665342 Fax: +33 147 562120 Web: www.pollutec.com

14-m

18-20 October 2000 Antwerp, Belgium Punrps &ValtRes rrsoo Contact: Fait-tee NV Tel: +32 3354 0880 Fax: +32 3354 0810 Web: www.fairtec.com/ pumps+valves

ocktber2ooo

Anaheim Covention Center, California vvfFrEczQDo 73rd Annual Conference and Expositicrn Contact: Water Environment Federation Tel: +l 703 664 2443 Fax: + 1 703 664 2475 Web: www.wef.org

tndian Chambers of Commerce and Industry Tel: +91 3736 76O70 Fax: +91 11 332 0714 Web: www.fkci.com

ORDER FORM

SPEED FAX: +a

(0)1865 843671

4 EASY WAYS TO ORDER: 1) 2) 3) 4)

~

I-

,-

I-

~~1~

FAX PRIORITY ORDERS DEPARTMENT: +44 (0)lSSS 843971 E-MAIL YOUR ORDER TO [email protected] TELEPHONE Amanda Arthur: +44 (0)1865 843181 POST YOUR ORDER TO: Priority Orders Department, Elsevi’ er Advanced Technology, PO Box 150, Kidlington, Oxford OX5 i lAS, UK

L-

For US ORDERS liki.I\

\ I ),rtc

Elsevier Science, Regional Sales Office, Customer Support ment, 655 Avenue of the Americas, New York, NY 10010, Tel: +1(212) 633 3730 Fax: +1‘(21i) 633 3680 Toll free: l-868-437-4636 or l-888-4ES-INFO

Depal rtUSA

1

September 200(

Pump Industry Analyst

CHESTERTON DIVESTS PUMP LINE TO BLACKMER The AW Chesterton Company has sold its pump division to Blackmer System One Inc, a Dover Resources Company. With the sale, Chesterton, headquartered in Stoneham, Massachusetts, will reposition itself to focus on its core competency businesses of fluid sealing devices and technical products. “While Chesterton’s pump division has been a fastgrowing operation, it would have required a significant investment in infrastructure, capital equipment, research and development and globalisation to allow it to prosper in the years ahead on a worldwide basis,” explained James Chesterton, CEO. The System One pump line will complement Blackmer’s current positive displacement product line of vane, progressing cavity, hose and eccentric disc pumps. Under a transition agreement, Blackmer System One will operate out of Chesterton’s existing Groveland Massachusetts manufacturing plant for several months until suitable facilities are secured locally. Blackmer will retain all Chesterton pump employees.

SULZER DIVESTS BURCKHARDT VACUUM SYSTEMS Sulzer has taken a further step in its restructuring programme with the transfer of the Vacuum Systems business of Sulzer Burckhardt to Onpro AG of Frenkendorf/BL, Switzerland from 1 September. Sulzer Burckhardt Vacuum Systems designs and produces liquid-ring vacuumicompression pumps and aggregates for the pharmaceuticals, chemical and CVD process industries. Sales for 1999 reached SFr7

million. Onpro plans to retain all ten Sulzer employees involved and will continue this business at the existing location in Basle, operating as a subsidiary, NSB Gas Processing AG. Onpro is an engineering company specialising in the design and delivery of plant and machinery for the chemical, pharmaceuticals and petrochemical industries.

CONFIDENT WEIR TARGETS ACQUISITIONS Weir Group believes that there is considerable scope in its mainstream activities for further consolidation and says it aims to play a leading role in this process. Sir Ron Garrick, back as executive chairman following Duncan Whyte’s recent resignation as chief executive (see Pump Industry Analyst, August 2000), says Weir is actively involved in negotiating disposals and that the proceeds will be used to expand the group’s core activities. Weir reports seeing increased project activity in many of its oil, power and water markets. While results from the Group’s subsidiaries in the first half of 2000 were mixed, Weir believes that its prospects are improving and continues to expect a strong second half and progress for the year as a whole from its existing operations. Total Weir Group turnover rose to L420.1 million for the first six months of 2000, from &357 million in 1999. In general Weir’s onerations outside the UK performed well while results from the Weir Slurry Group, incorporating the slurry pump operations of Warman and EnviroTech, were described as “excellent”. Engineering Products turnover in the first half was 6286.8 million, up from &23 1.3 million in 1999. Pumps accounted for 1

just over 60% of this turnover. Profit reached f23.6 million, compared with &19.2 million in 1999. Weir’s share price rose strongly on news that the company planned to expand through acquisition. At the end of July, Weir was the subject of media and market speculation that the company was itself a target bid, but no firm offers materialised.

HMD/KONTRO EXPANDS IN GERMANY Seal-less pump specialist HMD/Kontro has appointed Herbert Ott Vertriebsgesellschaft mbH (HOV) to strengthen its European distribution network. HOV one of Germany’s leading distributors of pumps, compressors and mixers to the process industry, now offers the full range of HMDiKontro magnetic drive seal-less centrifugal pumps developed for industrial applications in the chemical, petrochemical, pharmaceutical, biochemical and food industries. Jiirgen Brumme, HOV’s dedicated product manager for the HMDiKontro franchise, will be based at the company’s headquarters in Leonberg, near Stuttgart, where stock and service will be held. Based in Eastbourne, UK, HMD/Kontro is part of the US Sundyne Corporation and has installed over 65 000 pumps worldwide. Manufacturing to API, ANSl and IS0 standards, HMD has been awarded the British Safety Council Five Star Award and operates a continuous programme to improve cost of ownership and pump efficiency through its research and development and manufacturing techniques. HOV is a division of the Herbert Ott-Group and an affiliate of fluid metering company Lewa.

Editor Roisin Reidy Elsevier Advanced Technology PO Box 150 Kidlinqton

Oxford OX5 1AS United Kingdom

Tel: ~44 (0)1865 843695 Fax: +44 (0) 1865 843971 E-mail: [email protected] Web: www.worldpumps.com/pia Permissions may be sought ‘directly from Elsavier Science Ri hts & Permissions Department, P 8 Box 800, Oxford OX5 1DX, UK: phone: (+44) t865 843830, fax: (+44) t 865 863333, e-mail: permissions @elsevier.co.uk.You may also contact Rights & qerfnissions directly ~~~~~~~~~~~n~ eral Information’, then Permissions Query Form’. In the USA, users may clear permissions and make ayments through the Co right learance Center, Inc., 222 % osewood e Drive, Danvers, MA 01923, USA: phone: (978) 7508400, fax: (978) 7504754, gg.~~gp-g.g&$gg Service (CLARIS), 90 Tottanham Court Road, London WIP OLP, UK; phone: (+44) 171 436 5931; fax: (t44) 171436 3966. Other countries may have a local reprographic rights agency for payments.

Derivative Works Subscribers may reproduce tables of contents or prepare lists of articles inclodina abstracts for internal circulation v%hin their institutions. Parmission of the o&fisher is reauired for resaie or diiribution wtsib the institution. Permission of the publisher is required for all other derivative works, including comoilations and translalions.

Electronic Storage or Usage

Permission of the publisher is required to store or use electronically any material contained in this journal, including any article or part of an article. Contact the publisher at the address indicated. Except as outlined above, no part of this publication mav be reoroduced, &Fred in a ret&al sysiem ;r$$smitted in a?y form or by,any electronic, mechamcal. photocbpying, recording or otherwise, without prior written permission of the publisher. Address permissions requests to: Elsevier Science Rights & Permissions Department, at the mail, FLvrd e-mail addresses noted Notice No responsibility is assumed by the Publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances m the medical sciences, in particular, indeoendent verification of diaan$s;. and drug dosages should ti Although all advertising material is expected to conform to ethical (medical) standards, inclusion in this publication doss no! constitute a guarantee or endorsement of the quality or value of such product or of the claims made of ii by its manufacturer.

02167 Printed by Mayfield

Press (Oxford)

Limited, UK